The U.S. Securities and Exchange Commission (SEC) has charged a company and its president with securities fraud in connection with their efforts to raise funding via an initial coin offering (ICO).
Michael Stollery, also known as Michael Stollaire, has been accused alongside his firm Titanium Blockchain Infrastructure Services with violating the SEC’s antifraud and registration provisions in connection with a multi-million dollar token sale. The agency accused Stollaire of fabricating information in claims that Titanium had relationships with companies like PayPal and Disney.
Officials with the U.S. securities regulator obtained an emergency asset freeze and the appointment of a receiver in relation to the token sale, which raised as much as $21 million, according to the SEC.
The focus on alleged misrepresentation echoes similar actions by the agency to combat fraud related to the use case, given that the SEC has accused Centra and its three co-founders of lying about their relationship with card network operators Visa and Mastercard.
Robert Cohen, the head of the SEC Enforcement Division’s Cyber Unit, said in a statement:
“This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictional claims of business prospects. Having filed multiple cases involving allegedly fraudulent ICOs, we again encourage investors to be especially cautious when considering these as investments.”
According to statements, the complaint against Stollaire and Titanium was initially filed on May 22. Another company tied to Stollaire, EHI Internetwork and Systems Management Inc., was also named in the complaint.
Image via Shutterstock